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Caribbean Life, D 12 ECEMBER 18-24, 2020
New York Attorney General Letitia James. Associated Press / Richard Drew
James wins over $1M in
rent credits for tenants
By Nelson A. King
New York Attorney General, Letitia
James on Tuesday announced an agreement
that secures more than $1 million
in rent credits for harassed tenants and
provides housing placements for 10 homeless
families.
The agreement with private equity firm
Madison Realty Capital comes after James
found that the company aided and abetted
tenant harassment and other fraud by notorious
landlord Raphael (Rafi) Toledano.
“Today’s agreement stands up for all the
tenants harassed and pushed out of their
homes by a fraudulent landlord and the
lender that financed his unlawful operation,”
said Attorney General James.
“Madison Realty Capital aided one of
our city’s worst landlords in his unlawful
scheme, but we’re holding the company
to account and delivering real relief to the
many victims through rent credits and
housing placement,” he added. “My office
will continue to stand up for tenants who
rely on affordable, rent-stabilized housing
by stopping dishonest landlords and
their unscrupulous financiers dead in their
tracks.”
With the financial backing of Madison
Realty Capital, James said Toledano harassed
tenants through coercive buyouts;
executed illegal construction practices;
and failed to provide tenants with utilities,
repairs, and other necessary services.
Even with this track record, in 2015,
the attorney general said Madison Realty
loaned Toledano over $100 million to purchase
a 15-building portfolio in the East
Village, despite his limited experience in
managing a portfolio of this size, evidence
of prior tenant harassment, and plans to
continue to vacate rent-stabilized tenants
and renovate units in violation of law.
James’ investigation found that Madison
Realty Capital knew or should have
known of Toledano’s history, that the proposed
conversions were unlawful, and that
the aggressive schedule for buyouts and
renovations was likely to result in tenant
harassment.
As a result of the loan that allowed
Toledano to take over management of the
East Village Properties, she said Toledano
did exactly that —”harassing hundreds of
tenants, engaging in dangerous construction
practices, and failing to provide basic
services.”
In March 2017, the East Village properties
filed for bankruptcy.
Under the terms of this agreement —
which also resolves claims filed against
Toledano’s former business entities in New
York bankruptcy court — James said Madison
Realty Capital must now take ownership
of the 15 buildings in the East Village
portfolio subject to $1.05 million in rent
credits.
She said these rent credits will be shared
among the remaining tenants who suffered
through Toledano’s mismanagement
of these properties.
The owners of the buildings will also
ensure placement of 10 formerly-homeless
families and will adhere to Tenant Health
and Safety Protections During Construction
there.
Almost 200 of the 280 apartments in the
portfolio will be registered with the New
York state Division of Homes and Community
Renewal (NYSHCR) at or below a rent
of $2,000 per month (50 will be registered
at or below $1,000 per month), James said.
The Office of the Attorney General
(OAG) will also receive $150,000 to use for
restitution of harms caused by Madison
Realty Capital and Toledano, including
the loss of affordable housing in New York
City.
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